"Under the agreement, the companies dismissed the applications of the import suspension and other legal actions in Korea and Japan, as to their respective PDP patents," Matsushita said in a statement.

"As part of the settlement, the two companies have agreed to enter into a cross-licensing agreement regarding PC and DVD specifications as well as PDP patents," it said.

The two firms will collaborate in the field of residential air conditioners, it said.

Plasma display panels are flat-panel screens used for popular slim televisions and other display monitors. LG ranked second and Matsushita third in the global plasma panel market in 2004, according to press reports.

Matsushita, best known for its Panasonic brand products, had filed for an injunction with the Tokyo District Court to halt imports of LG's plasma panels to Japan, saying the South Korean maker infringed on patents related to plasma technology.

LG, for its part, filed a suit at the Seoul Central District Court to halt imports of Matsushita's plasma panels to South Korea, accusing the Japanese maker of violating LG's plasma patents.